tesAn electrical utility needs to generate 6,300 megawatts of electricity today. It has five generators (A, B, C, D, and E). If any electricity isgenerated by a given generator, that generator must be started up and a fixed start-up cost is incurred. There is an additional cost foreach megawatt generated by a generator. These costs, as well as the maximum capacity of each generator, are shown in the followingtable.Fixed start-up costA$3,000BCDE$2,000$2,500Cost per megawatt/day$1,500$1,000generatedMaximum capacity (MW/day$52,100$4* $6$6$71,8002,5001,5003,000Click here for the Excel Data FileFormulate and solve this model on a spreadsheet.a. Determine the minimum cost plan that meets the electrical needs for today.Note: Leave no cells blank. Enter "O" wherever required.Startup generator? (Enter 1 if "Yes", 0 if "No")Megawatt/dayb. Determine the total cost.Total cost

There are 5 generators which may be used to generate electricity. The details are given…

Answered: An electrical utility needs to generate…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 47P

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It costs a pharmaceutical company 75,000 to produce a 1000-pound batch of a drug. The average yield from a batch is unknown but the best case is 90% yield (that is, 900 pounds of good drug will be produced), the most likely case is 85% yield, and the worst case is 70% yield. The annual demand for the drug is unknown, with the best case being 20,000 pounds, the most likely case 17,500 pounds, and the worst case 10,000 pounds. The drug sells for 125 per pound and leftover amounts of the drug can be sold for 30 per pound. To maximize annual expected profit, how many batches of the drug should the company produce? You can assume that it will produce the batches only once, before demand for the drug is known.
The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon spawn during a 24-hour period and must be canned immediately. Tinkan has the following agreement with the salmon industry. The company can deliver as many cans as it chooses. Then the salmon are caught. For each can by which Tinkan falls short of the salmon industrys needs, the company pays the industry a 2 penalty. Cans cost Tinkan 1 to produce and are sold by Tinkan for 2 per can. If any cans are left over, they are returned to Tinkan and the company reimburses the industry 2 for each extra can. These extra cans are put in storage for next year. Each year a can is held in storage, a carrying cost equal to 20% of the cans production cost is incurred. It is well known that the number of salmon harvested during a year is strongly related to the number of salmon harvested the previous year. In fact, using past data, Tinkan estimates that the harvest size in year t, Ht (measured in the number of cans required), is related to the harvest size in the previous year, Ht1, by the equation Ht = Ht1et where et is normally distributed with mean 1.02 and standard deviation 0.10. Tinkan plans to use the following production strategy. For some value of x, it produces enough cans at the beginning of year t to bring its inventory up to x+Ht, where Ht is the predicted harvest size in year t. Then it delivers these cans to the salmon industry. For example, if it uses x = 100,000, the predicted harvest size is 500,000 cans, and 80,000 cans are already in inventory, then Tinkan produces and delivers 520,000 cans. Given that the harvest size for the previous year was 550,000 cans, use simulation to help Tinkan develop a production strategy that maximizes its expected profit over the next 20 years. Assume that the company begins year 1 with an initial inventory of 300,000 cans.
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Global Logistics needs to rent space for storing product for the next three years. The following information regarding the demand and spot price is available. Current demand for the product is 150,000. Historically, Global Logistics has required 1500 square feet to store 1500 units of the product. Demand for the product can go up by 20% with a probability of 0.7 or down by 20% with a probability of 0.3. Global Logistics can sign a three-year fixed lease to rent 150,000 square feet of space at $1.00 per square foot per year. The firm may also choose to obtain warehousing space on the spot market. The current spot market price is $1.20 per square foot per year. The spot price can go up by 10% with a probability of 0.8 and can decrease by 10% with a probability of 0.2. The firm receives a revenue of $1.22 for each unit of demand. a) Create a decision tree showing period 0, 1 and 2 for the scenario described above. b) Calculate the NPV for the option when the firm decides to sign a…
An electric cooperative's power generation costs $3.20/kWh. Data for two 50-horsepower motors are as shown below. If the interest rate is 20%, determine how many hours should the motors be operated at full load for them to be economical. If the number of hours exceeds the breakeven point, which of the two motors is more economical?
Boston Company use a special part in manufacturing of its finished products. The unit cost thisspecial part is $ 35, and details of its manufacturing cost is as follows. The $35 unit productcost of this part is based on average 25,000 number of parts produced each year.An outside supplier has offered to supply the 25,000 parts at a cost of $30 per part. The specialequipment used to manufacture the above part. This equipment can only be used formanufacturing of this part and if not used it has no resale value.The total amount of general factory overhead, which is allocated based on direct labor-hours,would be unaffected by this decision because it is fixed cost..Suggest the management whether to stop producing internally and buy them from theoutside supplier?Description CAD Direct Materials 10Direct Labor 6Variable overheads…
Western Chassis produces high-quality polished steel and aluminum sheeting and two lines ofindustrial chassis for the rack mounting of Internet routers, modems, and other telecommunicationsequipment. The contribution margin (contribution toward profit) for steel sheeting is $0.40 per poundand for aluminum sheeting is $0.60 per pound. Western earns $12 contribution on the sale of aStandard chassis rack and $15 contribution on a Deluxe chassis rack. During the next productioncycle, Western can buy and use up to 25,800 pounds of raw unfinished steel either in sheeting or inchassis. Similarly, 20,400 pounds of aluminum are available. One standard chassis rack requires 16pounds of steel and 8 pounds of aluminum. A Deluxe chassis rack requires 12 pounds of each metal.The output of metal sheeting is restricted only by the capacity of the polisher. For the next productioncycle, the polisher can handle any mix of the two metals up to 4,000 pounds of metal sheeting. Chassismanufacture can be…
An automotive warehouse stocks a variety of parts that are sold at neighborhoodstores. One particular part, a popular brand of oil filter, is purchased by thewarehouse for $1.50 each. It is estimated that the cost of order processing andreceipt is $100 per order. The company uses an inventory carrying charge based on warehouse for $1.50 each. It is estimated that the cost of order processing andreceipt is $100 per order. The company uses an inventory carrying charge based ona 28 percent annual interest rate.The monthly demand for the filter follows a normal distribution with mean280 and standard deviation 77. Order lead time is assumed to be five months.Assume that if a filter is demanded when the warehouse is out of stock, then thedemand is back-ordered, and the cost assessed for each back-ordered demand is$12.80. Determine the following quantities:a. The optimal values of the order quantity and the reorder level.b. The average annual cost of holding, setup, and stock-out associated…
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